New Venezuelan FinMin: Inflation Doesn't Exist

The late Venezuelan President Hugo Chavez was once described as a "Narcissist-Leninist" by a number of economic commentators. As we've subsequently learned, self-ingratiating policies for the alleged benefit of the global workingman worked a lot better when oil was at $100/barrel instead of less than a third of that. In the latter situation which Chavez's successors find themselves, the scope for the Venezuelans spreading their largesse from oil revenues is greatly diminished since, well, the country is now faced with empty coffers selling the stuff at below cost for months on end.

Enter Venezuela's new finance minister, Luis Salas. It's not a good start that he's not an economist by training but a sociologist, but it only gets more interesting. Recently, he declared that inflation does not exist:

Venezuela's new
economy czar Luis Salas is tasked with controlling what is believed to
be the world's highest rate of inflation, but comes to the job with an
unusual perspective: that inflation does not really exist.

President
Nicolas Maduro on Wednesday tapped the 39-year-old sociologist as vice
president for the economy amid soaring consumer prices and chronic
product shortages, signaling a move toward orthodox socialism in the
OPEC nation struggling under low oil prices.

Essays
written by Salas describe scarcity and spiraling prices as the result
of exploitation by businesses rather than government policy, offering an
academic underpinning to the "economic war" explanation that Maduro
uses to describe the current malaise of recession, runaway prices and
widespread product shortages.

"Inflation
does not exist in real life," he wrote in a 2015 pamphlet called "22
Keys to Understanding the Economic War." "When a person goes to a shop
and finds that prices have gone up, they are not in the presence of
'inflation.'"

Salas has argued
against the idea that excessive printing of money causes inflation - an
almost universally accepted tenet of macroeconomics. He insists prices
rise primarily because corporations seek excessive profit margins.

He also goes on a tired rather than proffer any explanation of how to deal with inflation (which you wouldn't have to deal with to begin with if it didn't exist):

Salas' numerous online essays are written in
flowing academic prose featuring caustic turns-of-phrase such as
"speculative-parasite-vulture capital" or "global war of the planetary
plutocracy."

Few offer specific
policy proposals. One list of ideas for economic policies for 2016
published on Salas' blog includes a recommendation that economic policy
should be "coherent" and "should not be passive but rather active and on
the offensive."

Going back to the father of socialism, did Marx also deny the existence of inflation? Actually, no. From Das Kapital:

If the paper money is in excess, if there is more of it than represents
the amount of gold coins of like denomination which could actually be
current, it will (apart from the danger of falling into general
disrepute) represent only that quantity of gold, which, in accordance
with the laws of circulation of commodities, is really required and is
alone capable of being represented by paper. If the quantity of paper
money issued is, for instance, double what it ought to be, then in
actual fact one pound has become the money name of about one-eighth of
an ounce of gold instead of about one-quarter of an ounce. The effect is
the same as if an alteration had taken place in the function of gold as
a standard of prices. The values previously expressed by the price ’1
will now be expressed by the price £2.

Why is it that today's socialists deny Marx's insights? If anything, this guy is even worse than Chavez--a "Fantasist-Leninist" [!] I'll stick with "inflation is always and everywhere a monetary phenomenon" which sounds rather more likely than "inflation doesn't exist."